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Federal Charter for Nonbanks Would Harm Unbanked

2012-01-02T21:11:48Z

By Kevin Prochaska

Ryan Gilbert's recent BankThink article "Give Nonbanks a Nationwide Reach" is part of a massive lobbying campaign by major payday lenders and others to sway Congress to pass H.R. 1909.

The National Pawnbrokers Association opposes the federal charter proposal Ryan Gilbert supports, because it is a bad deal for consumers and will further degrade credit options for the 44 million un- or underbanked consumers in the U.S. This legislation will provide the means for a powerful group of pay day lenders (including Gilbert's payday loan company BillFloat), subsidiaries of national banks and others to circumvent existing federal, state and local regulatory oversight, including provisions within the Consumer Financial Protection Bureau set forth to reign in predatory lending tactics by nonbank institutions.

Additionally, this potentially dangerous legislation will allow "big finance" to unfairly compete with community and small dollar lenders across America and the thousands of people employed by locally operated nonbanks like our small business members.

These charters are a bad deal for consumers. Specifically, charters will:

    * Be granted primarily or exclusively to giant providers of financial services in the payday loan industry and subsidiaries of national banks and federally chartered thrifts already under the Comptroller's regulation and supervision authority, providers who can afford the charter and annual fees the Comptroller will charge.
    * Allow charter holders to go anywhere and do anything as long as the Comptroller allows it and without worrying about state licensing or state consumer protection laws;
    * Allow charter holders to offer financial products that particular states have banned or regulated heavily — if, like the old "Mother, may I? Yes, you may!" game, the Comptroller gives them permission. As a result, charter holders could offer payday loans in states that banned them outright (Ohio, North Carolina, Arizona, and Massachusetts), in states that cap interest rates (Georgia, Montana and New Hampshire), and in states such as Virginia that limit the number of payday loans that can be made in a year to the same consumer.
    * Exempt charter holders from complying with the Truth in Lending Act's baseline credit-cost comparison tool — disclosure of the annual percentage rate — that every other creditor in the nation has had to disclose since 1969, making comparison shopping much harder for consumers.
    * Exempt them from using the same TILA disclosure forms, created by the Federal Reserve Board, that every other creditor in the nation will still have to use, further hindering comparison-shopping by consumers. Instead, they will be allowed to use different disclosure forms over which the Comptroller will have exclusive jurisdiction.

Charter holders, as a result, will be able to compete at lower costs than smaller, state-regulated entities. Lower costs for charter holders do not guarantee that credit will be more plentiful — or that consumers will pay less for credit, although that is what the proponents of HR 1909 are promising. In fact, once their competitive advantages drive out local small-dollar credit providers, the basic economics theory of supply and demand points to higher costs for the same products and services. This future financial un-level playing field and associated revenues obviously justifies the proponents' huge expenditures on their lobbying campaign.

This federal-charter legislation is touted as a panacea for the alleged paucity of small-dollar loans across the nation because banks do not offer this type of credit. It is important to set the record straight on this claim as well:

    * Big banks have never provided small-dollar, short-term loans (unless one counts credit cards that most of the 44-million un- or under-banked consumers cannot get). Efforts over the past decade to persuade banks to offer similar products, encouraged by Congress and the FDIC, have produced few, if any, noticeable gains for consumers. and,
    * Thousands of state-licensed providers already grant credit to the consumers on terms established and enforced by the states, and with the same TILA compliance duties as every other creditor. Other small businesses provide all the so-called "auxiliary" services such as issuance of money orders and remittance transfers that the states also have regulated effectively for several decades.

Supporters of this legislation are selling a bill of goods to some well-intended members of Congress, who are justifiably eager to help constituents at home. This legislation:

    * Casts aside more than 200 years of state regulation of nonbanks, and does vast damage to states' rights and federalism.
    * Allows powerful mega-retailers and nationwide payday lenders, and, not incidentally, subsidiaries of national banks or federal savings and loan associations, to circumvent existing federal, state, and local regulatory and consumer protection laws.
    * Makes credit shopping harder and credit offers far less transparent than they have been for more than 40 years.

Instead of creating a vast new supply of credit on reasonable terms from newly federally chartered providers, the legislation is far more likely to degrade further the credit opportunities, the assets and credit worthiness of consumers in the U.S. who need competitively priced small-dollar, short-term, safety-net loans that they get today from local community banks, credit unions, pawnbrokers and other state-licensed lenders. It also will cost local jobs and the health benefits.

This legislation is a "win-win" for mega-companies and mega-banks and "lose-lose" for everyone else. Hopefully, Congress will recognize the bill's flaws and will soundly reject the idea of a federal, non-depositary charter.

Kevin Prochaska
CEO, Lombard Financial
President, National Pawnbrokers Association

National Pawn awards $3,500 in prizes to each winner of Mother's Day Essay Contest

2011-05-10T15:06:00Z

May 10, 2011 - National Pawnbrokers Association

Bob Moulton, President of National Pawn and member of the Board of Directors of the National Pawnbrokers Association, announced the winners of the National Pawn Sponsored Mother's Day Essay Contest.

Neo Best, a kindergarten student at Pathways Elementary School in Hillsborough, and Horacio A. Rios, a fifth grader at Central Elementary School, also in Hillsborough, submitted the winning essays in a Mother's Day contest sponsored by National Pawn. With the two students tied for first place, Bob Moulton, owner of National Pawn, declared that he would award two first place prizes. The topic of the essay was, "My Mother." Prizes included a pair of diamond earrings valued at $2,000 for Neo and Horacio’s mothers, a $500 check for classroom supplies to Neo’s teacher, Mrs. Jennifer Behringer, and Horacio’s teacher, Mr. Brian Krauss, and a $1,000 check for school supplies to each winner’s school. Neo, Horacio and their families will be presented the prizes at a ceremony the day before Mother’s Day. Bob Moulton will preside over the ceremony to be held at 2:00 p.m., Saturday, May 7, in the National Pawn store at 2334 Guess Rd., Durham.

"I believe in actively encouraging education and supporting schools as a rule, and I feel that it is especially important during these times of declining tax revenues and shrinking budgets," said Moulton. "It was my intent to motivate the students to creatively express their feelings for their mothers or other strong female role models, as well as reward the teachers and the individual schools where the winners attend."

The contest was open to all K-5 students in the three major Triangle school districts: Durham, Orange and Wake. The judges for the contest were Frances Scott, news anchor at ABC11; Rick Armstrong, Health and Science Producer at WRAL News; Barbara Petty, editor of BOOM! and Greg Petty, publisher of BOOM!, along with local writers Alice Osborn, Jan B. Parker and Kathleen Fitzgerald.

NPA Unveils the New Verified Member Seal Program

2011-02-22T04:03:00Z

The Verified Member Program offers a NPA seal for members to display on their websites. When a user clicks the seal, a dynamically generated window appears with the member’s company info, activity status, accreditation, and more. This program is free for all NPA members and is an added value to NPA membership.

Visit the National Pawnbrokers Association website website to learn more about this new program.

Musical Instrument Gift Day Giving Children Instruments, for a Song

2010-11-17T07:22:00Z

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Boys & Girls Clubs of America and the National Pawnbrokers Association team up to bring music into the lives of thousands of children, just in time for Christmas.

The National Pawnbrokers Association (NPA) is sponsoring its second annual Musical Instrument Gift Day, where pawnbrokers from around the country make generous donations of musical instruments to charity organizations. This year, NPA has found a friend in the Boys & Girls Clubs of America, extending their national reach to Boys & Girls Clubs across the country.

Musical Instrument Gift Day is held on December 6 in honor of St. Nicholas Day and National Pawnbrokers Day. St. Nicholas was famed for his generosity and his charity to the poor and is the Patron Saint of Pawnbrokers. In honor of that charity and generosity, Members of the National Pawnbrokers Association will be presenting their donations of musical instruments to Boys & Girls Clubs nationwide on or around December 6, 2010.

If you are interested in participating in this yearʼs event, whether youʼre looking to donate instruments or youʼre a member of the Boys & Girls Clubs of America, you can sign up by visiting the Gift Day website www.GiftDay.org and clicking “Contact.” A member of the Gift Day team will work with you to connect you with a donor or a donation recipient, depending on your needs.

Last year Musical Instrument Gift Day was a huge success, with pawnbrokers in over 17 states donating over one thousand instruments. The donation event was a huge success in South Carolina, Ohio, Texas, and even Georgia, where Governor Sonny Perdue hosted a special donation ceremony in his office attended by pawnbrokers and eager, young students in need of instruments.

This year, letʼs work together to make Musical Instrument Gift Day even more successful and make an even bigger difference in childrenʼs lives.

Go to www.GiftDay.org to learn more about this exciting event.

PAWN AMERICA HONORED FOR “OUTSTANDING EXAMPLE OF POSITIVE COMMUNITY INVOLVEMENT”

2010-10-12T23:36:00Z

Financial Service Centers of America (FiSCA) Announces Pawn America As A2010 Activa Award Recipient

Burnsville, MN (October 4, 2010) – Pawn America is proud to announce the company has been honored as a 2010 Activa Award recipient. Launched in 1999 by FiSCA, the Activa Awards program honors outstanding examples of positive community involvement activities of its members throughout the country. FiSCA supports and encourages its members to make an investment in the communities that they do business by giving their time through community service and money through charitable contributions. As each year passes, the Activa Awards bring greater distinction and a better understanding of the pivotal role financial service centers play in making America’s neighborhoods a better place to live and work.

“Pawn America takes great pride in the initiatives we’ve created to address the needs we see in our communities,” says Pawn America Owner Brad Rixmann. “Whether it’s serving a meal at the Boys & Girls Clubs, volunteering time with the local Sheriff’s Foundation, or even donating “therapy-friendly” merchandise to local patients affected by injury, disease or illness…we want to help people. We believe in listening first, we then do our best to make a meaningful impact.”

Dave Crume, president of the National Pawnbrokers Association, lauded Pawn America in a recent statement. "Congratulations on winning this award for your accomplishments. It is a fitting reward and justly deserved for all of your efforts in your communities.
You have truly done some innovative charitable work here particularly with your libraries. Really, really cool idea!
Thanks for raising the bar for fellow pawnbrokers and financial service operators to beat!"

Pawn America has created and fostered several community initiatives for which the 2010 Activa Awards honor including:

• The Pawn America/Boys & Girls Clubs Kids Feeding Kids (KFK) initiative
Created to provide an opportunity for local kids to eat, learn culinary skills and cooperative behavior traits while serving their peers via a nutritious late-afternoon dinner 5 evenings a week. The goal of the program is to stop childhood hunger in areas of the Twin Cities that house a local Boys & Girls Clubs location. More than 50,000 meals are served annually.

• Hennepin County Sheriff’s Foundation
Pawn America is a valuable part of this independent, nonprofit, charitable organization dedicated to strengthening public safety through youth-based activity programs, prevention, intervention, education, outreach and 21st century crime fighting tools and programs.

• PC’s For People
A Partnership with this organization has collected hundreds of refurbished computers with the goal of giving outdated equipment a second lease by fixing it up for people who wouldn’t otherwise have the opportunity to own a computer. Recently, Pawn America developed a retail “curbside drop campaign” encouraging customers to drop off old and working computer systems at their stores for a gift certificate in return.

• The University of Minnesota Medical Center, Fairview Transitional Care Unit
Pawn America began earmarking “therapy-friendly” merchandise when a nurse called requesting a few items on the wish list of patients and caregivers at the Transitional Care Unit. These items were to help rehabilitate, entertain and even inspire patients and include Wii consoles, musical instruments, games, CDs, DVDs and other types of entertainment options.

• Pawn America Builds Libraries for Soldiers in Iraq
Shortly after the start of the War in Iraq, Brad Rixmann learned the son of two Pawn America employees was being deployed. He wanted to help out and decided to package and send components of a media library with the soldier. Brad gave the soldiers a collection of more than 1,000 DVD’s, CD’s, video games and movies to entertain and comfort soldiers during their downtime. Since the first installment, Brad and Pawn America have sent components to Iraq for two additional libraries.

For more information about the pawn industry, visit Pawn Shops Today

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NPA Unveils the New Verified Member Seal Program

Musical Instrument Gift Day Giving Children Instruments, for a Song

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